Home News Novavax Stock Doubles on $1.2 Billion Sanofi Deal for Flu and COVID-19 Vaccines

Novavax Stock Doubles on $1.2 Billion Sanofi Deal for Flu and COVID-19 Vaccines

by SuperiorInvest

Key takeaways

  • Novavax shares more than doubled in intraday trading on Friday as it announced a $1.2 billion deal to license its vaccine technology to Sanofi.
  • Novavax will jointly market its COVID-19 vaccine with the French pharmaceutical company, in addition to developing others such as a combination of the COVID-19 vaccine and the flu vaccine.
  • The vaccine maker also announced first-quarter results that included a larger-than-expected net loss.

Novavax (NVAX) shares more than doubled in intraday trading on Friday after announcing a $1.2 billion deal to license its vaccine technology to French drugmaker Sanofi (SNY).

Sanofi to pay Novavax up to $1.2 billion to license vaccine technology and co-develop new products

Novavax agreed to license its COVID-19 vaccine technology and other potential future vaccines to Sanofi, as well as jointly develop a combination vaccine designed to prevent both COVID-19 and the flu. Sanofi agreed to pay Novavax $500 million up front, with another $700 million in potential payments depending on regulatory and development milestones.

“Together, we can expand access to both our COVID-19 vaccine and our adjuvant to ensure that more people can benefit from the protection that vaccines can provide,” said Novavax Chief Executive Officer (CEO) John C. Jacobs. it's a statement. “Novavax is now in a stronger position to refocus our efforts on leveraging our technology platform and novel adjuvant in R&D and expanding our portfolio to help advance our mission of developing life-saving vaccines to combat diseases.” infectious”.

The deal will allow Novavax to lift its “going concern” warning, Jacobs told CNBC. The company first issued the warning in early 2023 over concerns that it would not be able to survive financially as demand for COVID-19 vaccines declined.

As part of the agreement, Sanofi will also acquire a less than 5% equity stake in Novavax, and Novavax will receive royalty payments on future sales of its COVID-19 vaccine and the future combination of the COVID-19 vaccine and the flu vaccine.

Novavax's first-quarter results miss estimates

In addition to the Sanofi deal, Novavax also reported first-quarter results Friday morning that missed analyst estimates.

Novavax reported first-quarter revenue of $93.9 million, below the $101.3 million analysts were expecting, according to estimates compiled by Visible Alpha. Novavax posted a loss of $147.6 million, or $1.05 per share, wider than the loss of $127.4 million, or 90 cents per share, that analysts had projected.

Revenue rose about $13 million from last year's first quarter, while it effectively cut its net loss in half from last year's mark of $293.9 million.

For the full fiscal year, Novavax lowered its projected revenue to between $400 million and $600 million, down from the previous range of $800 million to $1 billion. However, the estimated $570 million the company expects to receive from Sanofi this year raised its combined revenue and payout projections to $970 million to $1.17 billion.

The company also said it is prepared to introduce a cost reduction program over the next year, aiming to reduce its combined research and development (R&D) costs and selling, general and administrative (SG&A) expenses to less of $500 million for next year. end of fiscal year 2025. For fiscal year 2024, Novavax projects those expenses will be within a range of $700 million to $750 million.

Novavax shares were up more than 120% as of 10:30 a.m. ET on Friday to $9.90.

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